A growing Melbourne group has scooped four pubs from the highly awarded Zagame family for $99 million, in demonstration of the strength of the Victorian market despite lockdowns.
The institutional Zagame Group has sold lease interests in its self-branded venues at Berwick, Ballarat, Boronia and Reservoir.
All new 60-year leases, IPR Hotels is understood to have paid around $17m in Ballarat, $19m in Boronia, $21m in Reservoir and $41m for Zagame’s Berwick, which is on a massive corner lot, 14 kilometres from the Melbourne CBD.
“It’s a family buying a family business,” says Tom Francis, principal at IPR.
The family has been in the pub industry on and off since 1989, holding a collection of freeholds and leases.
Previously owning the Dorset Gardens, sold in 2007, and still counting freehold of the Family Hotel Newport, the group still operates the Kealba Hotel, bought early 2019, and the Summer Hill Hotel, under lease to Hotel Property Investments (HPI).
Tom joined the family business in 2016, at their Seagulls Nest operation. He says during the pandemic shutdown last year they were busy looking at acquisitions. Initially IPR signed for Zagame’s Reservoir, securing a 60-year (3 x 20) lease, which settled in March this year.
“It wasn’t like it all happened at once,” says Tom. “It went on from Reservoir; we bought Boronia, then as the relationship built with the Zagames, Berrick and Ballarat.”
IPR won’t be continuing the Zagame’s branding, opting to revert to old monikers or find new ones. Boronia will become simply the Boronia Hotel, Berwick will revert to its previous name, Berwick Springs, and Ballarat will become the Golden Point Hotel.
“Before the Zamage’s bought Reservoir, it was known as the Edwardes Lake Tavern. We’ve named it Edwardes Lake Hotel.”
IPR takes over at the second new pub, Boronia, next week. Berrick will follow in November, then Ballarat in February 2022.
The family has elected to get a footprint and management onsite at each, before making a few cosmetic changes.
The Zagame family will remain the freehold owner at all four locations. The transactions were brokered by Steve Cropley of Cropley Commercial.
Despite ongoing pandemic restrictions, Tom Francis says they are feeling “opportunistic” about growth in the Victorian market.
“As a family, the four Zagames leasehold purchases are a great fit to our current portfolio.
“I look forward to our expansion and further ventures in the future. As many know, we will most likely not stop purchasing after the Zagames acquisitions.”
